Value Stream Mapping Process


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Value Stream Mapping Process

  1. 1. Value Stream Mapping Process What, Where, When, Why, Who, Which, How etc Anand Subramaniam
  2. 2. Be aware.. <ul><li>Lean system implementation requires a high degree of discipline, and sometimes it can stress the workforce. </li></ul><ul><li>There is high level of co-operation & trust required between operators and supervisors. </li></ul><ul><li>Reward systems and labor classifications must often be revamped when a lean system is implemented. </li></ul><ul><li>Existing layouts may need to be changed. </li></ul><ul><li>Daily production schedules in high-volume, make-to-stock environments must be stable for extended periods. </li></ul><ul><li>If the inventory advantages of a lean system are to be realized, small lot sizes must be used. </li></ul><ul><li>If frequent, small shipments of purchased items cannot be arranged with suppliers, large inventory savings for these items cannot be realised. </li></ul>
  3. 3. Highlights <ul><li>Overview - Value Stream Mapping (VSM) </li></ul><ul><li>Pre-VSM </li></ul><ul><li>VSM Review – Current State </li></ul><ul><li>VSM Review – Future State & Implementation Road Map </li></ul><ul><li>Excellence Road Map </li></ul>
  4. 4. Highlights - 1 <ul><li>Lean Process </li></ul><ul><li>Value Stream Mapping (VSM) </li></ul><ul><li>Value & Non Value Add </li></ul><ul><li>Principles </li></ul><ul><li>SIPOC </li></ul><ul><li>Definition </li></ul>
  5. 5. What is a Lean Process ? Define value from the customer’s perspective Map the value stream Create flow; eliminate the root causes of waste Create pull where flow is difficult to achieve Seek perfection via continuous improvement
  6. 6. VSM – Why, What, Where? <ul><li>Key tool for Lean implementation, makes process & problems visible </li></ul><ul><li>Forms the basis of an improvement plan and a common language </li></ul><ul><li>Highlights Suppliers, Inputs, Process, Outputs and Customers (SIPOC) </li></ul><ul><li>Is a qualitative tool for identifying and eliminating waste (or muda) </li></ul><ul><li>Aligns organisations processes, creates a sense of teamwork / ownership </li></ul><ul><li>Involves drawing - current state, future state, & an implementation plan </li></ul><ul><li>Spans the entire value chain, from raw materials receipts to finished goods delivery </li></ul><ul><li>A paper and pencil tool to help you visualise and understand the linkage between material and information flow </li></ul><ul><li>Focuses on maximising the overall flow </li></ul>
  7. 7. Value Add & Non Value Add <ul><li>Value Add (VA) </li></ul><ul><li>Any activity the customer values (and is willing to pay for) </li></ul><ul><ul><li>Who are your customers? </li></ul></ul><ul><ul><li>What do they really want? </li></ul></ul><ul><li>To be considered “value add”, a process step must have YES to all these questions </li></ul><ul><ul><li>Does the customer care? </li></ul></ul><ul><ul><li>Does it change the thing? </li></ul></ul><ul><ul><li>Is it done right the first time? </li></ul></ul><ul><ul><li>Is it required by law or regulation? </li></ul></ul><ul><li>Non Value Add (NVA) </li></ul><ul><li>Any activity that consumes time and / or resources & does not add value to the service or product for the customer. These activities should be eliminated, simplified, reduced, or integrated. </li></ul><ul><ul><li>Necessary – Legal / regulatory requirements </li></ul></ul><ul><ul><li>Unnecessary - Waiting, Unnecessary processing, Errors/defects, Motion (people), Transportation (product), Underutilised people, Inventory </li></ul></ul>
  8. 8. VSM - Principles <ul><li>Diagnostic Tool </li></ul><ul><ul><li>Reveals hidden symptoms of larger problems </li></ul></ul><ul><li>Strategic Planning Activity </li></ul><ul><ul><li>Helps prioritise opportunities for improvement </li></ul></ul><ul><ul><li>Results in an implementation plan </li></ul></ul><ul><li>Macro-Level - Visual Representation </li></ul><ul><ul><li>Information flow </li></ul></ul><ul><ul><li>People and material flow </li></ul></ul><ul><ul><li>Each process block represents a handoff or a break in the timeline </li></ul></ul><ul><li>Contains Relevant Metrics </li></ul><ul><ul><li>Lead time – throughput / turnaround / flow time </li></ul></ul><ul><ul><li>Cycle time – touch / process time </li></ul></ul>
  9. 9. SIPOC - Process Map S I O C P S uppliers I nputs P rocess O utputs C ustomers
  10. 10. Definition <ul><li>Cycle Time (C/T) – time to complete a single unit of production </li></ul><ul><li>First Time Through (FTT) - % of jobs that are complete and accurate the first time that they are processed. </li></ul><ul><li>Demand – average number of units per shift </li></ul><ul><li>Batch Size (BS) – size of typical batch that is processed as a unit </li></ul><ul><li>Takt time – rate of demand </li></ul><ul><li>Throughput time – sum of delays and process time </li></ul><ul><li>Process Ratio = Total process time / Throughput time </li></ul><ul><li>Value Added Ratio = Total VAT / Throughput time </li></ul>
  11. 11. Highlights - 2 <ul><li>Current Process Challenges </li></ul><ul><li>Conceptual Overview </li></ul><ul><li>VSM Charter </li></ul><ul><li>VSM Boundary </li></ul><ul><li>Product Family Matrix </li></ul><ul><li>Data Collection </li></ul><ul><li>Future State – Questions & Blueprint </li></ul>
  12. 12. Current Process Challenges <ul><li>Lots of waiting </li></ul><ul><li>Lots of travel </li></ul><ul><li>Lack of communication </li></ul><ul><li>Lack of skills / not trained </li></ul><ul><li>Too many handoffs </li></ul><ul><li>Too many approvals </li></ul><ul><li>Too many workarounds </li></ul><ul><li>Duplication of work </li></ul><ul><li>Dead zones - places where work gets held up or lost </li></ul><ul><li>Lost time - people looking for work and / or re-work loops to correct errors </li></ul><ul><li>Broken interfaces - ineffective or non-existent interfaces </li></ul><ul><li>Different prioritisation rules in different departments </li></ul><ul><li>High Lead Time (slow throughput/turnaround) </li></ul><ul><li>High WIP (waste in process – bottlenecks / backlogs) </li></ul><ul><li>Low CT/LT ratio (lots of waiting) </li></ul>
  13. 13. Conceptual Overview - Where to start? <ul><li>VSM Charter & Scope </li></ul><ul><ul><li>Process Boundaries / Scope </li></ul></ul><ul><ul><li>Roles & Responsibilities </li></ul></ul><ul><ul><li>SIPOC </li></ul></ul><ul><li>Product Family </li></ul><ul><ul><li>Start with a single product family </li></ul></ul><ul><li>Current & Future State </li></ul><ul><ul><li>Collect data on process & system </li></ul></ul><ul><ul><li>Be specific </li></ul></ul><ul><ul><ul><li>how many finished part numbers in family? </li></ul></ul></ul><ul><ul><ul><li>how much is demanded? </li></ul></ul></ul><ul><ul><ul><li>how often? </li></ul></ul></ul><ul><ul><li>Verify & repeat the Process </li></ul></ul><ul><li>Develop Implementation Plan </li></ul>Current state drawing Future state drawing Work plan & implementation Charter / Scope Product family
  14. 14. VSM Charter <ul><li>Vision </li></ul><ul><li>Mission </li></ul><ul><li>Improvement Objectives </li></ul><ul><li>Strategic Plan </li></ul><ul><li>Critical Success Factors </li></ul><ul><li>Drivers </li></ul><ul><li>Process Description </li></ul><ul><li>Management Information System </li></ul><ul><li>Start / End Date </li></ul><ul><li>High Level Scope </li></ul><ul><li>Benefits Realisation </li></ul><ul><li>Process Champion </li></ul><ul><li>Team Leaders </li></ul><ul><li>Team Members </li></ul><ul><li>Facilitators </li></ul><ul><li>Risk & Tolerance </li></ul><ul><li>Drivers </li></ul><ul><li>Roles & Responsibilities </li></ul>
  15. 15. VSM - Boundary <ul><li>Current State </li></ul><ul><li>Define the boundaries </li></ul><ul><li>Define the value </li></ul><ul><li>Identify the tasks and flows of material and information between them </li></ul><ul><li>Identify resources for each task and flow </li></ul><ul><li>Create the current state map </li></ul><ul><li>Future State (Design) </li></ul><ul><li>Visualise the “Ideal State” and design the future state map </li></ul><ul><ul><li>Identify value added and waste from Current State </li></ul></ul><ul><ul><li>Reconfigure the process to eliminate waste / Add Value </li></ul></ul><ul><li>Implementation Plan </li></ul><ul><li>Develop Action plans and track </li></ul>
  16. 16. Define Boundary <ul><li>Before launching on VSM, define the Start and End points </li></ul><ul><ul><li>Prepare As-Is physical map – How / where (inputs to outputs) </li></ul></ul><ul><ul><li>Prepare As-Is geographical map - area(s) where process is performed </li></ul></ul><ul><ul><li>Add process control information flow to as-is physical map </li></ul></ul><ul><li>A logical starting point - where Inputs cannot be returned to the preceding step. </li></ul><ul><li>Capture the process as it is actually performed and include workarounds, rework, informal activities, feedback loops etc </li></ul><ul><li>In lean, we commonly define “work-in-process” is anything you can’t ship to the customer or return to the supplier </li></ul><ul><li>Add As-Is process metrics - counts, rates </li></ul><ul><ul><li>The number of parts required by customers </li></ul></ul><ul><ul><li>The number of machines and operators available to work on parts </li></ul></ul><ul><ul><li>The rates that process steps work on parts </li></ul></ul>
  17. 17. Eg. Boundary - Start & End Points <ul><li>Inputs </li></ul><ul><li>Market Research </li></ul><ul><li>Data - Competition </li></ul><ul><li>Firm’s Strategy </li></ul>Define Go-to Market Drivers Review Objectives, Goals & Strategies Identify Risks, Assumption & Constraints Conduct “What If” Scenarios START Evaluate Scenarios Approve Go-to Market Plan <ul><li>Outputs </li></ul><ul><li>Marketing Plan </li></ul><ul><li>KPI </li></ul><ul><li>Team </li></ul>END
  18. 18. Material & Information Flow <ul><li>Use the “Scope” document to map the product or service flow </li></ul><ul><li>Map the whole value stream by conducting a “walk through” of the actual process and collect information </li></ul><ul><ul><li>Start with the final step and walk backwards (customer perspective) </li></ul></ul><ul><ul><li>Outline major process blocks </li></ul></ul><ul><ul><li>Chunk of activities that occur before a handoff </li></ul></ul><ul><li>Stay focused on the norm </li></ul><ul><ul><li>Use the “70% rule” to avoid getting bogged down with exceptions </li></ul></ul><ul><li>Interview workers to obtain data </li></ul><ul><ul><li>Cycle time (CT) </li></ul></ul><ul><ul><li>Lead time (LT) </li></ul></ul><ul><li>Bring your stopwatch and do not rely on information that you do not personally see </li></ul><ul><li>Draw by hand and use a pencil </li></ul>
  19. 19. Resource Identification <ul><li>VSM are strategic in nature </li></ul><ul><ul><li>The resulting implementation plan is the tactical component </li></ul></ul><ul><li>Nominate a VSM Head, who has </li></ul><ul><ul><li>Top Management support </li></ul></ul><ul><ul><li>Power to influence changes </li></ul></ul><ul><li>Team composition </li></ul><ul><ul><li>Team / Process Leaders </li></ul></ul><ul><ul><li>Team Members who have process knowledge </li></ul></ul><ul><ul><li>Facilitators / Management Consultants </li></ul></ul>
  20. 20. Product Family Matrix X X X X X U X X X X X X XX X X X X X EL X X X X X L X X X X X X M X X X X X X S X X X X X X ES P R O D U C T S 8 7 6 5 4 3 2 1 Routing - Process / Operations #
  21. 21. Data Collection <ul><li>Pack sizes at each process </li></ul><ul><li>Working hours and breaks </li></ul><ul><li>Inventory Points (location & size) </li></ul><ul><li>How Operations are scheduled </li></ul><ul><li>Overtime per week </li></ul><ul><li>Process cycle times </li></ul><ul><li>Scrap </li></ul><ul><li>Rework </li></ul><ul><li>Downtime </li></ul><ul><li>Demand rates by process (Takt Time) </li></ul><ul><li>Number of product variations at each step </li></ul><ul><li>Shipping/Receiving schedules </li></ul><ul><li>Activity </li></ul><ul><li>Department performing </li></ul><ul><li>IT systems used </li></ul><ul><li>Current backlog/WIP </li></ul><ul><li>Demand rate </li></ul><ul><li>Work Time </li></ul><ul><li>Number of people / operators </li></ul><ul><li>Prioritisation rules </li></ul><ul><li>% Quality (first pass Yield) </li></ul><ul><li>Batch size </li></ul><ul><li>Run frequency </li></ul><ul><li>Equipment availability </li></ul><ul><li>C/T - Cycle (touch) time (observed & effective) </li></ul><ul><li>C/O - Changeover time & frequency </li></ul>
  22. 22. Future State Questions <ul><li>What should be the Takt time (available time / customer demand)? </li></ul><ul><li>What does the customer really need? </li></ul><ul><li>How often will we check our performance to customer needs? </li></ul><ul><li>How can we improve the flow, with fewer interruptions? </li></ul><ul><li>How do we control work between interruptions? How will work be prioritised? </li></ul><ul><li>Is there an opportunity to balance the work load and/or different activities? </li></ul><ul><li>Where can continuous flow be put in place? </li></ul><ul><li>Where should pull systems be implemented? </li></ul><ul><li>Where, when and how will scheduling be done? </li></ul><ul><li>How do we perform load leveling and what will be the product mix? </li></ul><ul><li>What should the management time frame be? </li></ul><ul><li>What process improvements are necessary, to achieve the future state? </li></ul><ul><li>What will the future state metrics be? </li></ul><ul><ul><li>Quality </li></ul></ul><ul><ul><ul><li>Errors </li></ul></ul></ul><ul><ul><li>Delivery </li></ul></ul><ul><ul><ul><li>Lead time </li></ul></ul></ul><ul><ul><li>Customer service </li></ul></ul><ul><ul><ul><li>How well do you provide services (internal and external) </li></ul></ul></ul><ul><ul><li>Cost </li></ul></ul><ul><ul><ul><li>Reducing errors, rework, handoffs, waiting and lead time </li></ul></ul></ul>
  23. 23. Design Future State – Blueprint <ul><li>Define how the plant will operate in the future (blueprint) </li></ul><ul><li>Consider whether (remove waste / non value add activities) </li></ul><ul><ul><li>everything done currently at each stage is really necessary </li></ul></ul><ul><ul><li>the impact if superfluous tasks was to be removed </li></ul></ul><ul><ul><li>the process can be rearranged in a more efficient sequence </li></ul></ul><ul><ul><li>a different flow layout or transport routing can be introduced </li></ul></ul><ul><li>Validate Customer Demand </li></ul><ul><li>Draw the Future State Process Flow </li></ul><ul><li>Map the Future State Material & Information Flow </li></ul><ul><li>Calculate Total Product Cycle Time </li></ul><ul><li>Detail Off-Line Activities </li></ul><ul><li>Outline an Implementation Plan </li></ul>
  24. 24. Highlights - 3 <ul><li>Current State (As~Is) </li></ul><ul><ul><li>Step 1 - Define Customer’s Demand </li></ul></ul><ul><ul><li>Step 2 - Map Basic Production Processes </li></ul></ul><ul><ul><li>Step 3 - Define Data To Be Collected </li></ul></ul><ul><ul><li>Step 4 - Collect & Map Data </li></ul></ul><ul><ul><li>Step 5 - Map Information Flow </li></ul></ul><ul><ul><li>Step 6 - Calculate Current State </li></ul></ul><ul><ul><li>Step 7 - Compute Takt time </li></ul></ul><ul><ul><li>Step 8 - Line Balancing </li></ul></ul>
  25. 25. Define Customer’s Demand <ul><li>Demand = 3,200 pieces / week </li></ul><ul><ul><li>Type L = 1,000 piece week </li></ul></ul><ul><ul><li>Type S = 2,200 piece week </li></ul></ul><ul><li>Plant Operates 1 shift / day </li></ul><ul><li>Packaging = 60 pieces / Tray </li></ul><ul><li>Customer Shipment = 1 / day (Truck) </li></ul><ul><li>Supplier Shipment = 1 / week (Truck) </li></ul>
  26. 26. Map Basic Production Process <ul><li>Ensure </li></ul><ul><ul><li>Mapping begins with customer’s demand </li></ul></ul><ul><ul><li>Conduct a walk through and obtain high level process information </li></ul></ul><ul><ul><li>Start from the shipping (Staging Process) and work up-stream to the receiving dock </li></ul></ul><ul><ul><li>The team involved should map the entire process stream from start to end </li></ul></ul>
  27. 27. Map Process (Contd.) – Mapping Icons © 2007 Pearson Education
  28. 28. Define Data To Be Collected <ul><li>Cycle Time (C/T) </li></ul><ul><li>Changeover Time (C/O) </li></ul><ul><li>Uptime </li></ul><ul><li>Number of Operations </li></ul><ul><li>Break Time </li></ul><ul><li>Work Time (minus breaks) </li></ul>
  29. 29. Define Data (Contd.) - Work Time Calculation <ul><li>Day = 1 shift </li></ul><ul><ul><li>1 Shift / day = 8 hours = 28,800 seconds / shift ( 8 x 60 x 60 x 1 shift) </li></ul></ul><ul><li>Breaks </li></ul><ul><ul><li>Morning Tea (15 mins) : Lunch (30mins) : Afternoon Tea (15 mins) </li></ul></ul><ul><ul><li>Breaks = 60 mins = 3,600 seconds { (15 + 30 + 15) x 60} </li></ul></ul><ul><li>Working Time / Operating Time </li></ul><ul><ul><li>Shift Time – Break = 25,200 working seconds / shift (28,800 – 3,600) </li></ul></ul>
  30. 30. Collect & Map Data (Customer & Supplier)
  31. 31. Map Information Flow
  32. 32. Calculate Current State <ul><li>1 week = 5 working days </li></ul><ul><li>Demand = 3,200 pieces / week or </li></ul><ul><li> 640 pieces / day </li></ul>Press Process Type L + S = 2,250 pieces (1,000 + 1,250) Duration = 3.5 days (2,250/640)
  33. 33. Result - Current State © 2007 Pearson Education A Representative Current State Map for a Family of Retainers at a Bearings Manufacturing Company
  34. 34. Compute Takt Time <ul><li>1 week = 5 working days </li></ul><ul><li>Demand = 3,200 pieces / week </li></ul><ul><ul><li>Type L = 1,000 piece week (200/day) </li></ul></ul><ul><ul><li>Type S = 2,200 piece week (440/day) </li></ul></ul><ul><li>Total Pieces / Day / Shift = 640 </li></ul><ul><li>Operating Time / Working Time = 25,200 </li></ul><ul><li>Takt Time = Operating Time / Shift </li></ul><ul><li>Customer Requirment / Shift </li></ul><ul><li>Takt Time = 25,200 = 39 seconds </li></ul><ul><li>640 </li></ul>
  35. 35. Total - Processing / Work Time 60 Seconds
  36. 36. Line Balancing Work or Process Time = 60 Sec Takt Time = 39 Sec Work / Takt time = # of Operators Required = 60/39 = 1.54
  37. 37. Line Balancing (Contd.) <ul><li>You require 1.54 operators </li></ul><ul><li>Having 2 is costly and having 1 can lead to burnout </li></ul><ul><li>We could reduce Takt time from 39 sec to say 35 sec or less, by combining some tasks and avoiding burnout </li></ul>
  38. 38. Line Balancing (Contd.)
  39. 39. Highlights - 4 <ul><li>Future State (To~Be) </li></ul><ul><li>Implementation Road Map </li></ul><ul><li>Improvement Results </li></ul>
  40. 40. Future State (To~Be) <ul><li>Objectives </li></ul><ul><ul><li>Eliminate / reduce unnecessary NVA steps </li></ul></ul><ul><ul><li>Optimise VA steps </li></ul></ul><ul><li>Build Consideration (from current state) </li></ul><ul><ul><li>Eliminate/merge steps </li></ul></ul><ul><ul><li>Create parallel paths </li></ul></ul><ul><ul><li>Implement pull, if continuous flow isn’t possible </li></ul></ul><ul><ul><li>Reduce or eliminate batches </li></ul></ul><ul><ul><li>Create standard work </li></ul></ul><ul><ul><li>Create an organised, visual workplace </li></ul></ul><ul><ul><li>Eliminate unnecessary approvals </li></ul></ul><ul><ul><li>Identify NVA tasks from customer’s point of view </li></ul></ul><ul><ul><li>Level production mix </li></ul></ul>
  41. 41. Implementation Road Map <ul><li>Clarify Business Drivers and Key Customer Metrics </li></ul><ul><li>Assess and Map Current Capabilities (Baseline) </li></ul><ul><li>Identify Opportunities for improvement including the elimination of waste </li></ul><ul><li>Create a Vision for the Future Based on Voice of the Customer and Voice of the Business </li></ul><ul><li>Analyse Gaps and Create Action Plan to Succeed </li></ul><ul><ul><li>Use Robust Set of Tools (i.e. Lean Six Sigma) </li></ul></ul><ul><li>Determine Priorities and Resources Necessary </li></ul><ul><ul><li>Structured Process Improvement </li></ul></ul><ul><li>Track Impact through Metrics </li></ul><ul><li>Celebrate Wins - With Customers : Employees : Suppliers </li></ul>
  42. 42. Improvement Results Morale # steps CT/LT ratio Cycle time Lead time % Improvement Future State Current State Metric
  43. 43. Highlights - 5 <ul><li>Excellence Road Map </li></ul>
  44. 44. Excellence Road Map Approach / Develop Plan Deployment / Execute Plan Results 1 Assess & understand Set direction Develop key plans 2 3 Communicate & integrate plans 4 Develop cross - functional strategy teams 5 Develop / Integrate detailed implementation plans 6 Execute implementation plans 7 Quarterly , integrated operations leadership review 8 Strategic Planning Process 1 Define the process Establish metrics Determine performance 2 3 Analyse process stability 4 Set goals 5 Analyse & plan improvements 6 Implement improvement 7 Process Based Management Update Future State Set initiative priorities Initiative # 1 Initiative # 2 Initiative # 3 Initiative # 4
  45. 45. <ul><li>Good Luck </li></ul><ul><li> </li></ul>